Barclays results depict bleak picture of South African economy

Barclays results depict bleak picture of South African economy

Johannesburg-based Barclays Africa Group’s discouraging earnings report has delivered further evidence of South Africa’s gloomy economy.

The lender reported 10 percent decline in earnings excluding one-time items at its main South African consumer unit in the 6 months through June this year. Deposits fell 14 per cent.

Maria Ramos, who took charge as CEO of Barclays Africa in 2009, admitted that the economic environment would like remain “challenging” for the next many months.

She also portrayed a bleak picture for the rest of year across Barclays’ businesses in a dozen African countries, predicting low to middle single digit growth in loans.

Henry Hall, an analyst at HSBC Holdings Plc, said, “The main risk to our view on Nedbank and on South African banks in general remains the political and economic situation in South Africa.”

Hall predicted that Barclays Africa, which is controlled owned by London-based Old Mutual, will likely report a 2 per cent growth in earnings per share excluding one-time items.

On Friday, the stock slipped further on the six-member FTSE/JSE Africa Banks Index, extending its losses to 14 per cent this year.

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